a. Definition and Characteristics:

The Holding Company in Lebanon was introduced by the legislative Decree No. 45 dated 24/06/1983.

The main characteristics of the Holding Company as defined by the said decree are as follows:

1. Legal Status: The Holding Company shall take the form of a Joint Stock Company and shall abide by the same law provisions governing this form of companies, with some exceptions to be described below.

2. Capital: Minimum Capital LBP/30.000.000/ (Around USD/20.000/), that can be deposited in foreign currency.

3. Number of Partners: the Minimum number of shareholders is three (3), no maximum number.

4. Object of the Company: the Object of the Company is restricted to the following:

i. Owning shares or parts in existing Lebanese or Foreign Joint Sock or Limited Liability Companies or participating in the formation thereof.

ii. Managing the Companies in which it owns shares or parts.

iii. Granting loans to these companies or guaranteeing loans towards third parties, for this purpose the Holding Company may borrow money from banks, issue bonds in accordance with Article 122 of the Code of Commerce, provided the issued debentures do not exceed in value, at any time, five folds its capital, including reserves, as evidenced in the last approved balance sheet. The Holding Company may not extend loans to companies operating in Lebanon in which its share in the Capital is less than twenty percent.

iv. Appropriation of patents, inventions, concessions, trademarks and other reserved rights and leasing same to enterprises located in Lebanon or abroad.

v. Owning movables and fixed assets provided they are strictly assigned for the purposes of its operations on condition that the Law concerning the acquisition of real estate by foreigners in Lebanon is duly observed.

5. Prohibited Activities: All activities which are not included in the object of the Company as detailed above.
The Holding Company may not have a Direct ownership in excess of 40% in more than 2 companies carrying on, in Lebanon, the same industrial commercial or non commercial activities should this ownership violate the prohibitions provided in the Anti-Trust Law.

6. Tax: the Holding Company has a Special Tax Treatment as described below.

7. Appointment of an Attorney and Auditor: the Appointment of an Attorney and an Auditor is a must. The Auditor should be residing in Lebanon and of Lebanese nationality. No additional Auditor shall be appointed by the Commercial Court.

8. Administration: the Administration of the Company shall be entrusted to a Board of Directors composed of a minimum of three members and a maximum of twelve. The Holding Company is exempted from the requirements of Lebanese Directors in the Board of Directors (As per the Law No. 772 dated 11/11/2006). If the Chairman of the Board is a foreign national, he does not require a Lebanese Work Permit, provided he does not actually reside in Lebanon.

9. Head Office: the Head Office of the Holding Company must be in Lebanon where the Legal records and documents should be kept.

10. Company’s Structure:

. General Meetings of the Shareholders:

i. The constituent Assembly which is held once to confirm the Formation of the Company.

ii. The Ordinary General Meeting which is held at least once per year in Lebanon after closing of the Annual Accounts and may, under special circumstances, be convened once or more during the year provided the object of such meeting does not concern the amendment of the company’s statutes.

iii. The Extraordinary General Meeting shall deliberate on all prospective amendments of the statutes with the exclusion of changing the company’s nationality, increasing the range of liability of shareholders or affecting rights of third parties.

ii. The Board of Directors: The Board of Directors shall have the broadest powers to implement the resolutions of the General Meetings of shareholders, and to carry out all acts required for the smooth operation of the Company. The meetings of the Board of Directors might be held abroad.

b. Formation:

The Holding Company is structured a formed like a Joint Stock Company. A special Register kept the Commercial Register in Beirut in which all Holding Companies should be registered.

1. Information and Documents required:

• The Articles of Association duly signed by the Partners before the Notary Public.
• Full name, nationality, Place and Date of Birth, and the domicile of each of shareholders along with a copy of their ID.
• The Name of the Company.
• The object or purpose of the Company as defined by Law.
• The minutes of Meeting of the Constituent Assembly Meeting.
• The minutes of the Meeting of the Board of Directors in which the Chairman was elected.
• The amount of the capital and the value of contribution made by each partner along with the Deposit Advise from the bank.
• The Commercial Circular showing the name and signature of the Authorized signatory.
• The address of the registered office and the addresses of the branches if any.
• The date of formation of the Company and its duration.

Any amendment on the status of the Company should also be registered in the Commercial Register.

2. Registration Procedures and cost:

An Application should be submitted to the Commercial Register in Beirut along with the Articles of Association and the required documents after the payment of the Financial Tax within five date of the signature of the Articles of Association.

The Official Charges for the registration of a Holding Company at the Commercial Register is estimated as follows:

- Financial Tax: LBP/1.000.000/ (Around USD/667/) + 3/1000 of the capital amount to be paid at the Office of the Ministry of Finance.
- Judicial Fees: LBP/500.000/ (Around USD/334/).
- Official Fees: 5.5/1000 of the Capital Amount.
- BBA Fees: 1/1000 of the capital amount to be paid within the Notary Public Fees.
- POA registration: LBP/100.000/ (Around USD/67/).
- Stamps: LBP/4.000/ (on the Application).
- Each Certified True Copy of the Registration Documents: LBP/2000/.